Staircasing and selling for Shared Ownership properties

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Staircasing and selling for Shared Ownership properties

Staircasing refers to the practice of purchasing additional percentages of a shared ownership house. Depending on the type of lease there may be restrictions on time and amount of staircasing, but often 25 per cent portions are available until the homebuyer reaches 100 per cent. The cost of staircasing depends on the valuation of the property at the time the purchase takes place.

Once the buyer reaches 100 per cent of the property, they effectively own it on a long lease, not as a freehold. At this point, the buyer only has to pay ground rent on the property (a very low figure) but does not have to pay rent to the housing association they have purchased from.

How would I go about staircasing?

In order to purchase a further part of your home, it will be necessary to contact the housing association you have purchased from. At this stage, an independent valuation will be commissioned. The valuation costs are entirely the responsibility of the buyer, and must be paid in full before staircasing occurs. Depending on the share you wish to purchase, you must pay this percentage of the value as determined by the valuation. If the buyer still wants to purchase a further share in the house, they will have between three and six months to pay. If a valuation expires it will be necessary to renew it.

Selling a shared ownership property

Selling your equity in a shared ownership property is simple. You simply sell at the percentage you own, depending on the valuation. For instance, if you own 50 per cent of a £100,000 house, you can sell your share for £50,000. However, if you own 100 per cent of the property you can sell the house without restrictions in price.

Finding a buyer for a shared ownership property

Most estate agents are familiar with shared ownership properties, and will charge a small commission fee for their services. Alternatively your local housing association may have details of people interested in buying a shared ownership property.

Furthermore, the Housing Corporation has set up a scheme called Shared Ownership HOMES. To find out more about the Shared Ownership HOMES scheme call direct on 0345 585757 or write to: Shared Ownership HOMES, 26 Chapter Street, London SW1P 4ND.

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